08/03/2009


Vivo vs. Claro in the 1st semester 2009

 

América Móvil is the leader in cellular market share de cellular in Latin America in 2Q09. Together, the companies concentrate 70% of cellulars in the Region. América Móvil's leadership is set due to its domain position in Mexico where it has 58 million cellulars (more details), against 15.9 million from Telefonica.

 

In Brazil, Vivo (Telefonica/Portugal Telecom) is the biggest operator with 29.3% of market share, followed by Claro o (América Móvil) with 25.4%.

 

Vivo and Claro presented in the 1st semester of 2009 net adds from 1.87 to 1.75 million cellulars respectively.

 

 

 

Their market strategies in 2009 have being very similar, with less aggressive plans to prepaid segment, what resulted in fall of MOU, and curves very close to churn.

 

 

In the comparison between the 1st semester of 2009 with the same period of 2008, Vivo presented bigger growth of net revenue (6.5%), despite the bigger growth in Claro's cellular base.

 

 

1st Sem 09/1st Sem 08
Vivo
Claro
Net Revenue
6.5%
4.6%
Cellulars
15.8%
22.3%

 

This result is due to the 52% fall projected by Teleco in the revenue of cell phone sales. Claro's net revenue of services increased 11.5% in this period, against 8.3% from Vivo.

 

The bet of both operators for 3G has helped revenue growth. The participation of net revenue of data and SVA in Vivo's net revenue of services reached 12.6% in 2Q09. In Claro it reached 11% in 1Q09.

 

 

This rise, however, wasn't enough to avoid ARPU fall in 2009.

 

 

 

Claro's ARPU continues to be inferior than Vivo's, despite the company had reduced prepaid participation in its base.

 

Lower ARPU is one of the causes that led Claro to present lower EBITDA margin in comparison with Vivo's.

 

 

 

You could ask:

  • Will Claro reach Vivo in ARPU and ABITDA margin?
  • Will Claro surpass Vivo in market share? When?
  • Will both operators change their strategies in the 2nd semester as a response to Oi's growth?
  • How can churn decrease help the difference of market share?

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Note: The opinions expressed in the published articles in this section are their authors' responsibility.

 

 

 

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